🇬🇪 Tax residency in Georgia

You're probably wondering if spending half a year in Georgia will suddenly mean you owe them taxes on your entire global income. It's a common question for digital nomads, and the answer is usually "no," but with a few critical caveats.

The golden rule is 183 days. If you're physically in Georgia for more than 183 days within any consecutive 12-month period, you are generally considered a tax resident. That's the basic threshold. However, it's not just about the calendar. Georgia also has a "centre of vital interests" test. This means even if you're under 183 days, if your personal and economic ties are predominantly with Georgia, they can still deem you a resident. Think about it: do you own property there? Is your spouse and children living there? Is your main business registered and operating from Georgia? These are the kinds of things that can pull you in, even if you're just shy of that 183-day mark. Owning property is a big one. So is having your family based there. If you have a registered business in Georgia, that's another strong indicator.

Let's talk about what happens if you do cross that line, or trigger the centre of vital interests test. Georgia operates on a territorial taxation principle for most individuals. This is huge. It means you're generally only taxed on income earned within Georgia. Income earned from foreign sources is often exempt. This is where the "worldwide taxation: false" note comes in. So, if you're a US citizen earning income from a US client while living in Tbilisi, that US-sourced income is typically not taxed by Georgia. You'll still owe US taxes, of course, but Georgia won't double-dip. If you were to be subject to worldwide taxation (which is rare for individuals unless specific circumstances apply, perhaps related to very high-level business activities or specific investment structures), the top marginal rate is 20%. That's on your global income, not just Georgian-sourced. For someone earning, say, $100,000 annually from clients outside Georgia, that 20% rate would apply to the entire $100,000 if they were a worldwide tax resident, amounting to a $20,000 tax bill. But again, this is the exception, not the rule.

Now, for the nomad sweet spot: the Individual Entrepreneur (IE) status. This is a game-changer for many. If your annual turnover is less than **$155,000 ** (or 500,000 GEL), you can register as a small-scale IE and pay just 1% on your turnover. This is incredibly low. It shelters your income from the standard progressive tax rates. Eligibility is straightforward: you need to be an individual, not a legal entity, and operate within certain business activity limits (most digital nomad work falls within these). The catch? This 1% applies to your turnover, not your profit. So, if you have high expenses, you might still pay more tax than you would on a profit-based system. Also, this regime typically applies to income generated from clients outside Georgia. If you're providing services to Georgian companies, the standard 1% income tax rate (applied to profit) might be more appropriate, or even the standard progressive rates if your income is very high.

What about tax treaties? For US, UK, and German citizens, Georgia has double taxation treaties. These treaties generally ensure you're only taxed in one country on the same income. For instance, if you're a US citizen and meet the criteria for tax residency in both countries, the treaty will usually dictate that your income is taxed where you are considered "ordinarily resident." If you're spending most of your time in Georgia and have your economic and personal centre there, the treaty would likely support Georgia's claim to tax you, and the US would provide credits for taxes paid in Georgia. The key is to understand the tie-breaker rules within these treaties, which often look at permanent home, centre of vital interests, and habitual abode.

When does hiring a local Georgian accountant make sense? If you're planning to stay longer than six months, have registered an Individual Entrepreneur status, or are even slightly unsure about your tax obligations, paying a local accountant is almost always worth it. For a fee that might range from **$50 to $150 ** per month, they can ensure your IE registration is correct, file your minimal tax returns accurately, and advise you on any changes in legislation. That small cost can save you from significant penalties or unexpected tax bills down the line, especially if your income situation is complex.

you're unlikely to hit worldwide taxation in Georgia unless you're actively trying to establish deep roots and significant economic activity there, and the 1% Individual Entrepreneur regime is incredibly attractive for most nomads earning foreign income.

This information is for educational purposes only and does not constitute legal or tax advice.